Lombard Medical and MicroPort Scientific announced a strategic partnership and a significant infusion of capital into Lombard Medical by MicroPort.
This partnership will allow Lombard Medical to accelerate commercialization in key global markets with its two key products: Aorfix, the only stent graft to hold global approvals to treat abdominal aortic aneurysms (AAA) with aortic neck angles up to 90 degrees, and Altura, a highly innovative stent graft that offers a simple and predictable treatment option for standard AAA anatomy.
The agreement provides MicroPort the exclusive marketing rights for Lombard Medical’s Aorfix and Altura AAA stent graft product lines in China, as well as the right to a technology license to manufacture the products for the China market.
Lombard Medical and MicroPort will also enter into a component supply manufacturing agreement whereby MicroPort will manufacture in its facilities in Shanghai certain components for the Aorfix and Altura product lines. Lastly, MicroPort will also have exclusive marketing rights for both Altura and Aorfix in Brazil.
In exchange, MicroPort has invested $15 million in a combination of Lombard Medical common stock and convertible debt. MicroPort purchased $5 million in common stock at $0.62 per share representing a 29% ownership stake in Lombard Medical based on common stock currently outstanding.
MicroPort will have a pro rata purchase right on future equity offerings by Lombard Medical. In addition, MicroPort was issued a 5-year $10 million unsecured promissory note bearing interest at a rate of six-month LIBOR plus 4.0% from Lombard Medical which is convertible at any time prior to maturity by MicroPort into Lombard Medical common stock at a price of $0.90 per share.
Lombard Medical will also appoint two representatives of MicroPort to serve on its board of five non-executive directors.
Following the transaction, Lombard Medical will have 27,950,785 shares of common stock outstanding. Lombard Medical plans to use the proceeds of this investment for general corporate purposes.
“The strategic partnership with MicroPort benefits all Lombard stakeholders, including physicians and their patients, our employees and, of course, our shareholders. The financing provides the necessary operating capital to fund our commercial and regulatory programs aimed at accelerating adoption and utilization across Europe where Aorfix is well accepted and Altura is generating significant interest among clinicians,” Lombard Medical CEO Simon Hubbert commented.
MicroPort Chairman and CEO Dr. Zhaohua Chang stated, “We are extremely pleased to be adding two highly differentiated products in Aorfix and Altura to our market-leading endovascular portfolio in both China and other emerging markets.
“We look forward to partnering with Lombard Medical to offer the premier portfolio of endovascular devices to treat patients requiring aortic artery aneurysm repair.”
MicroPort Scientific Corporation is a leading medical device company with business focusing on innovating, manufacturing, and marketing high-quality and high-end medical devices globally.
MicroPort maintains world-wide operations in a broad range of business segments including Cardiovascular, Orthopedic, Electrophysiological, Endovascular, Neurovascular, Surgical, Diabetes Care and Endocrinal Management, and others.
Lombard Medical, Inc. is an Oxfordshire, UK-based medical device company focused on the $1.8bn market for minimally invasive treatment of abdominal aortic aneurysms.
The Company has global regulatory approval for Aorfix™, an endovascular stent graft that has been specifically designed to treat patients with aortic neck angulation up to 90 degrees.